#CryptoFees101 Crypto Fees 101: A Beginner's Guide
When using cryptocurrencies, you’ll often come across fees. These fees vary by blockchain, wallet, and transaction type. Here’s a clear breakdown to help you understand them:
---
📌 Types of Crypto Fees
1. Network/Blockchain Fees (a.k.a. Gas Fees)
What it is: Payment to miners (Proof of Work) or validators (Proof of Stake) to process and confirm transactions.
Example: On Ethereum, this is called a gas fee.
Who sets it: It’s dynamic—based on network demand and complexity of the transaction.
Volatile? Yes. Busy times = higher fees.
2. Exchange Fees
When you buy, sell, or trade crypto on platforms like Binance, Coinbase, or Kraken:
Trading Fee: Charged per trade (usually a small % of the trade).
Withdrawal Fee: Charged when you move funds out of the platform to your own wallet.
Deposit Fee: Rare but can apply to fiat or non-native tokens.
3. Wallet Fees
Most wallets are free to use, but:
Custodial wallets (like those on exchanges) might charge withdrawal fees.
Non-custodial wallets (like MetaMask or Ledger) just pass on network fees.
4. Bridge or Cross-Chain Fees
What it is: Charged when moving assets between different blockchains.
These often include fees on both the source and destination chains.
---
🛠️ What Affects the Cost?
Factor Impact on Fee
Network Congestion More users = higher fees
Transaction Type Complex smart contracts = higher gas
Speed Preference Paying more = faster confirmation
Token Standard ERC-20 tokens on Ethereum cost more than native tokens like ETH or BTC
---
🧠 Tips to Save on Fees
Use Layer 2 networks (e.g., Arbitrum, Optimism, Polygon for Ethereum).
Avoid peak hours for transactions.
Use exchanges or wallets that support lower-fee chains (e.g., BNB Chain or Solana).
Batch transactions if supported.
---
🔄 Real-World Example (Ethereum)
Sending ETH: $3–10 depending on congestion).
Sending USDC (ERC-20): Higher fee because of added complexity.
Swapping tokens on Uniswap: Higher still, due to contract interaction.
